INTRODUCTION

Exporting is merely a selling but when it is selling at home, it does not bother you because you are in personal contact with a buyer for which you do not need to comply with several procedural requirements including filling and exchanging of a lot of documents. But the difference comes when you intend to sell to some one who is thousands of miles away from you, speaking different language, having different customs, preferences, currency and import regulations. In order to facilitate trade with other countries, certain sets of rules have been developed by the trading nations over the centuries, which are normally followed in foreign trade today. The International Trade is governed by rules made by the World Trade Organisation (WTO). Details on WTO can be obtained from Information Advisory Centre (IAC) of the EPB.

SELECTION OF A PRODUCT
If you want to enter export trade, the first thing you have to do is to decide about the product, which you intend to trade. You should have intimate knowledge about the product and sources of supply. If you have varied sources of supply, you will have no problem in procurement and shipment. But if you produce the product yourself at effective cost and exercise quality control, then you can become a successful exporter within shortest possible time. You can also analyse which products are exported to which country. This information is available in the IAC of EPB.

OPENING OF AN OFFICE
After selection of product, you may open an office, give it a name, print letterheads, install phone and fix a signboard on your business premises.

REGISTRATION FOR EXPORT

Previously it was mandatory to register your firm as an exporter for-five years from the nearest office of the EPB against payment of nominal fee. However registration procedures for both imports and exports have been abolished and now registration is not required for either export or import.

SELECTION OF MARKET
The exporter cannot go to every country in the world to persuade people to buy his product. Even the largest international firms do not trade with the whole world and not every country can or will buy what a particular exporter may sell to them. In view of scarce resources and shortage of experienced marketing personnel, the exporters should be selective and concentrate on markets, which could yield the best results. For this one has to examine

i. ii. iii. iv. v. vi.

The economic position of the country Size of the Market and whether it is expanding or shrinking. Market growth in a given product. Unit price of the product. Whether it is more or less than other countries. Import regime in the importing country. Location of the market etc

QUOTING A PRICE
It is easy to quote price at home. For this one has just to calculate cost of production with packing and transportation charges and add profit. But in case of export, quoting of price means many things. For this one has to examine several things including the following: i. What price to charge to remain competitive abroad?

ii. While calculating prices one has to think about all the cost including, packing, insurance, credit, agents commission, octroi duties, documentation fee, marking charges, transportation charges, export duties etc. iii. For securing good price one has also to check up price of the same product abroad. If there is a good mark up in price in foreign market, one should not loose sight of it. EPB can help you get price information further its trade offices posted abroad.

SIGNING OF A CONTRACT
When prices are accepted then a contract is signed with the firm for supply of goods which becomes binding on both the buyer & seller. Contract is a document, which normally contains. i. ii. iii. iv. v. vi. Name of exporter Name of importer Item of sale Unit price Total quantity Terms of delivery (FOB, C&F, CIF etc.)* Incoterms deal with the questions related to the delivery of the products from the seller to the buyer. This includes the carriage of products, export and import clearance responsibilities, who pays for what, and who has risk for the condition of the products at different locations within the transport process. Incoterms are always used with a geographical location and do not deal with transfer of title. Terms of payment (There could be basically two arrangements for payment; first being through direct funds transfer without involving any credit facility. This funds transfer could be both before the shipment of goods or after the shipment of goods generally referred as Cash Against Documents (CAD). Second arrangement is through the Letter of Credit (LC). The customers bank provides a letter of credit, which promises to pay the supplier as long as the terms are met. There are two types of LC, LC sight and LC Deferred payment. The payment may be paid immediately at sight or at a later date). Mode of shipment (Sea, Air, Road) Currency in which transaction will be made. Validity period of a contract & delivery period. Shipping marks if any. Arbitration clause.

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viii. ix. x. xi. xii.

TERMS OF DELIVERY
When the exporter is making an offer, he quotes the price of his product. If the offer is accepted then a contract is signed between the buyer & the seller. The contract includes terms and conditions under which goods are delivered.

EPB for certain textile item s for exports to

The buyer sitting in the overseas market is normally not interested to receive charge of goods at one's factory site but he may be interested to get charge of goods on FOB basis which means free on Board at airport or seaport. It means that charges of the consignment are fully paid up to that point and the rest of the freight is paid by the buyer. Terms of delivery are not only important for quoting price but it also makes clear as to who is responsible for the goods if anything goes wrong. The most frequently used terms of delivery are as under: -

FINANCING FOR EXPORT

The exporter should accept order, which he can fulfil easily. He should have the necessary finances or access to finances for effecting shipment and the capacity to wait till the sale proceeds are received. In this connection, term of payment plays an important role, as it should be timed to keep you solvent at the time of need. For export pre-shipment and post-shipment credits are available from the Govt. on concessionaire rate. The exporter can make use of it.

PACKING
Packing should be sea, air and roadworthy. The container should be in a position to carry contents to the destination in perfect condition. For reduction in cost most economical packing material be used. Pakistan Packing Institute can help you.

TRANSPORT
Light and costly items are normally sent by air whereas as heavy items are shipped by sea. In each case the most economical mode should be used to reduce cost.

INSURANCE
Insurance is necessary to recover cost in case of loss. But where the exporters are sure that the chances of loss are minimum they do not insure consignment. In case the buyer insists on Insurance then it must be done.

DOCUMENTATION
The following documents are normally used in exports: 1. E-Form 2. Shipping Bill 3. B/L or AWB 4. Commercial Invoice 5. Packing List 6. Certificate Country of origin 6(a) GSP 7. Textile quota Export licence/visa restraint 8. Pre-shipment certificate through management textile item. 9. Export contract registration details (Through authorised Commercial Bank). (Through authorised Clearing agents). (Through Clearing agents)

(Through Chamber) or (Through EPB) document required for textile items under quota

Additional

POST SHIPMENT DOCUMENTS

1. Textile quota Export licence/visa document required for textile items under quota restraint 4th copy of shipping (through customs) bill to be used for rebates on bank/sales tax refund/textile quota. 2. BCA (Bank Credit Advice) to be received from commercial banks after foreign exchange is received. The BCA is considered proof for the purpose of rebates, refinance scheme etc.

HOW TO CLAIM DUTY DRAWBACKS

Duty Drawback is the most commonly availed incentive by exporters. It is the amount reimbursed by the government to exporters as compensation for Customs Duty collected at the time of import. For the purpose, CBR sets aside a certain percentage of customs duty collected on imported raw material for incentivitising export production. The following documents must be in order when Exporter files the claim for export rebate and submits the file to the customs rebate section 1. Bank Credit Advice ( B.C.A ) 2. Bill of Lading (First Original). 3. Railway Receipt (Attested by the Railways). 4. Customs Signed Invoice with Two Photocopies. 5. Packing List. 6. Exchange Rate Certificate 7. Copy of Shipping Bill. 8. Photo Copy of Form E. 9. Laboratory Test Report. (if required) 10. Photocopy of SRO. (relevant to exporters product) 11. Copy of Cross Border Certificate (In case of export through land route). 12.Sales Tax Return of clearing agent of previous month (if claim launched through clearing agent)